Personal Banking E-Newsletter - September 2011

Kids and Money: A Little Education Pays Off

Just about anyone who's ever watched a child or grandchild go from the crib to kindergarten and beyond has uttered the phrase, "They grow up so fast." Although you can't really freeze a youngster's precious moments in time, you can take steps to make sure that his or her journey to adulthood starts with a sound understanding of money, investments, and personal financial responsibility. The following activities will help.

Count on Counting Your Change

Smart shopping might begin with a hunt for bargains, but it should end with a review of your transactions. To drive this message home, encourage your kids to unload the groceries and simultaneously compare price tags with the receipt. If they find a mistake, let them hold on to the refund.

Play "The Stock Market Game™

Get online and go to www.smg2000.org. There you'll find "The Stock Market Game." Sponsored by the Foundation for Investment Education, it lets kids in grades 4 through 12 assemble and monitor a hypothetical $100,000 portfolio for 10 weeks.

Make a Matching Contribution

Want to motivate a child to save? Just offer to "match" a portion of each savings account deposit he or she makes. And don't be afraid to set a few rules — for example, matching contributions can't be spent on candy or pizza.

Take Stock of Household Products

If your child is old enough to understand the concept of stocks and publicly traded companies, go through the house together and identify favorite items, such as computers and clothing. Then look up the manufacturer's stock price and monitor it over time.

*Source: Standard & Poors. © 2010 Standard Poor's Financial Communications. All rights reserved.
*Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates
 

Not FDIC insured

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May lose Value

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Coulee Bank and Coulee Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.


How to Sniff Out a Charity Scam

In the aftermath of Hurricane Irene or other natural disasters, donating to a charity can bring much-needed relief to suffering victims. Unfortunately, not every charity is on the up and up. Scammers preying on people's emotions and desire to help are plentiful after a disaster, making it hard to determine what is real and what isn't.

"There's always going to be unscrupulous people that try to get in the middle of the flow of money to charities," says Sandra Miniutti, vice president of marketing for Charity Navigator in Glen Rock, N.J. "Making sure it's an actual charity still doesn't mean they are going to do great things, but at least you know it's not an individual walking away with your money."

Before you donate your hard-earned money, follow these tips to confirm the charity you are donating to is indeed legitimate and not a charity scam.

Verify the charity

Following on the heels of any disaster, a slew of new charities will crop up to aid victims. While many are legitimate, many are charity scams. Thankfully there is a way to confirm the legitimacy. Unless it's church-related, all charities based in the U.S. are given tax-exempt status from the Internal Revenue Service.

An easy way to confirm a charity is legitimate is to check out IRS Publication 78, says Bennett Weiner, chief executive of the Better Business Bureau, or BBB, Wise Giving Alliance in Arlington, Va. IRS Publication 78 is an online directory consumers can use to search a charity's status.

Keep in mind that churches don't have to formally apply for tax-exempt status with the IRS, so they may not be listed in the directory, Weiner says. The BBB also has a "For Charities and Donors" Web page, which lists legitimate charities. Using that or another charity verifying website like CharityNavigator.org can help ensure the so-called charity isn't trying to scam you.

Be wary of unsolicited requests for donation

Whether it's a person standing outside a store with a jar or an email asking you to click on a link to donate, experts say you should be wary of any unsolicited requests for donations. "Emails that claim to link to a well-known relief group may end up being a phishing activity designed to steal personal information," says Weiner.

Phishing is a type of online identity theft. It uses email and fraudulent websites designed to steal your personal data such as credit card numbers, passwords or account data, according to Microsoft's Safety & Security Center website. The best thing to do is to go directly to the charity instead of linking to it from an email or text message.

"When Hurricane Katrina happened, the FBI reported roughly 4,000 bogus websites stealing people's information and/or their money, and that may happen again," says Miniutti.

She says social media has raised the stakes for charity scams because it's hard to confirm what's behind a Facebook message or Twitter feed. "It's easy to create a fake website that looks like a legitimate charity," Miniutti says.

Question any charity that claims a 100 percent donation

Sure, we would all love to see 100 percent of our donation go to aid the victims of a natural disaster, but the reality is that charities have operating costs just like any other business. Weiner says consumers should be skeptical of any charity that claims the entire donation is going to the victims. "After every disaster, some charity makes that claim," says Weiner, noting that even credit card donations have some form of processing fees.

Avoid charities that are pushing a hard sell

While it's a charity's mission to solicit people for donations, any charity that puts excessive pressure on you to donate or demands an on-the-spot gift, especially a cash one, should raise alarm bells, Weiner says. It might be a charity scam. Legitimate charities give you the time to go to their website or research what they are trying to do before you make a donation.

Consumers also need to be mindful of telephone solicitations that appeal to your emotions but don't tell you what the charity is actually trying to accomplish. Weiner says, in that case, take down the name of the organization and check its legitimacy before making a donation.

"Give with your head not just your heart," Weiner says.


The Best Time to Buy a Car

You've heard all the advice about the best time to buy a car, and now you're eager to bounce into a showroom and snag a killer deal. But it's not that easy:

There's no particular part of any month when you're guaranteed to get the best bargain.

There's no one day of the week when dealers will be most open to lowball offers.

There are just as many people who think you'll get a good deal in the early morning as those who think the day's end is when the salespeople get sleepy, sloppy, or desperate to make great deals.

All that, however, doesn't mean you can't save by gauging the timing of your transactions and being aware of market forces. And keep in mind that the rules are different for new cars versus used cars.

The tax-time used-car bubble

Steven Lang, who runs a dealership and an auto auction in the Atlanta area and writes for TheTruthAboutCars.com, says the used-car market is particularly sensitive around the time Americans are getting their tax refunds.

"From mid-February through early June, the auto industry goes through an event called tax season," Lang says. "Folks receive their refund checks from the IRS, which in turn creates a nice little bubble of activity in the used-car industry."

As evidence of this bubble, Lang cites the prices paid for used cars at auction during March and April. "Compared to three months (earlier), I would estimate cars sold between $700 and $1,500 higher than what was then the market price," he says.

How to Buy a Used Car

It makes sense that with tax refunds in hand, many people have the chance to put a down payment on a used car or buy a used car outright. So that's when a lot of buyers are out there. And when there are a lot of buyers and supply doesn't increase, prices go up.

"I'd say used-car dealers have done two-thirds of their business for the year by the Fourth of July weekend," Lang says. "The best time to buy is October or the beginning of November. There are no holidays then. No one is getting their bonuses. And the inventory is depleted. Wholesale prices are down then, too. It all reflects the retail climate."

The new-car market isn't as sensitive to the tax-refund bubble. In fact, according to data from Edmunds.com, during 2010, new-car transaction prices showed the greatest discounts in March and July. April and May were close behind.

The end of the month may not matter

"There's some truth to the idea that new-car dealers may make better deals at the end of the month," says Phil Reed of Edmunds.com. "But people shouldn't think that a little tip like that alone will get them a great deal."

New-car sales are greatly influenced by manufacturers -- both by what incentives and financing programs they have in place and by production rates and the resulting size of their inventories. Sometimes such incentives or other sales promotions run out at the end of a month, and it may be in a dealership's interest to make a better deal then.

But a lot of buyers believe they can get better deals at the end of the month. That means more people are chasing cars at the same time. And more buyers chasing the same number of cars means dealers have less incentive to offer bargains.

Beyond that, there's nothing that says manufacturers have to end their incentives at the end of the month; they can end them any time they please. The trick is to know what the incentives are and when they're in place.

Websites such as Kelley Blue Book and Edmunds.com track incentives and inventories and report them. Use those tools.

Rainy daze

"People who think they'll get a better deal on rainy days and such are just being silly," Reed says. Dealers don't throw their business sense overboard just because it's a little damp outside, and they can wait out a cloudburst.

"It's easier to shop when there's nobody else on the lot," Reed says. "So being the first customer of the day may not be a bad idea. But that's not going to necessarily save you a lot of money."

Shopping late in the day or on weekends can be a hassle because a lot of people fresh from work may be there doing the same thing. And there are few things less pleasant than sitting in a busy showroom for hours trying to complete a purchase.

Do the wrong thing

"If it weren't for the recent tsunami in Japan, I'd think you'd be able to get a great deal on a Toyota Yaris," Lang says.

According to Ward's Auto, Toyota had enough of its not-so-popular Yaris subcompacts on hand in early March to last for 105 days of sales. In comparison, Toyota had only 32 days' worth of Prius hybrids. That meant getting a great deal on a Yaris would've been much easier than finding a heavily discounted Prius.

But the March 11 earthquake and tsunami in Japan dramatically reduced Toyota's homeland production. So even fewer Prius models are available, and the inventory of Yaris models has been eaten away. It also doesn't hurt that the Yaris gets solid fuel economy at a time when gas is headed up beyond $4 a gallon. The window of opportunity to get a great deal on a Yaris is likely closing.

"The way to get ahead is to do the unpopular thing," Lang says. "Buy the car no one else wants while its inventory is piling up."

So follow the news, adjust your expectations and buy an unpopular car when it's in great supply.

The new and old bargains

Last year, Chevrolet was on the verge of replacing its unloved Cobalt with the new Cruze. In order to keep Cobalt sales moving and the Lordstown, Ohio, plant that built it humming, General Motors put large incentives on it.

"Cobalts were going out the door for $9,995, with $4,000 worth of incentives," Lang recalls.

Older designs facing the end of their production lives are often the most heavily discounted by their manufacturers, so it's good to follow what's coming up. For instance, Honda has announced that a new Civic is coming for the 2012 model year. Right now may be the best chance ever to get one of the current, popular and well-designed 2011 Civics at a discount.

On occasion, however, a new model may be the best deal. When a carmaker is entering a part of the market it's never been in before, it may discount the new product substantially to gain market share. The most notable example of that was in 1990, when Toyota was determined to establish its then-new Lexus brand and was selling the exquisite LS 400 luxury sedan for about $35,000 -- at least $10,000 less than comparable models from Mercedes or BMW.

More recently, Hyundai kept down the price of its Genesis as it sought to enter the luxury market. And Kia has been aggressive in pushing its redesigned Sorento, a small SUV, as it opened a factory in West Point, Ga., that greatly expanded production capacity.

Market timing

The market for cars is, like the market for every other commodity, one that's driven by information -- imperfect, muddled and contradictory information. So keep abreast of the news, cruise the manufacturers' websites to look for big-money incentives and open yourself up to considering unpopular vehicles that may be great bargains.

The better you know what's going on in the market, the better you'll know when is the best time to strike and make your purchase.


Monitoring Your Elderly Parents’ Finances

We all know a senior citizen living on a fixed income – these days, who doesn’t? In general, seniors have more costly medical expenses than their children and grandchildren, and if their finances suffer a significant setback they don’t have the time to recoup their losses the way a 30 or 40 year old does.

That’s why, even though scams targeting the elderly are prevalent, they aren’t the only things to watch for when it comes to your parents’ finances. Pleas for cash from legitimate organizations can be just as dangerous to their bank account. Their “good deed” could potentially put them in financial trouble.

How do you know if your elderly parents are at risk?

  • Elderly victims are usually between the ages of 80 and 89 and live alone.
  • Women are two times more likely to be victims than men.
  • If your parents receive lots of telephone sales calls (ex. 20+ unsolicited calls/day).
    • Scammers know senior citizens answer their phone and are reluctant to hang up on anyone.
    • Thieves will sell names and phone numbers of seniors who prove to be phone-receptive.
  • Your parents may be on a “sucker list” if their mail is filled with sweepstakes notifications, free gift offers and more magazines than they could possibly read.
    • Once a senior takes the bait for one scam, thieves sell the person’s name, address and telephone number.
  • If they have a hard time saying “no” to legitimate requests for money.

How can you help protect your parents’ finances?

  • Start by asking your parents which organizations matter the most to them.
    • Develop a giving plan that includes only those groups.
    • Keep a list of these groups so you can refer to it if your parents want to start writing checks for other groups.
  • Put your parents’ phone number on the Do-Not-Call registry.
    • This registry won’t stop unsolicited requests for donations which often begin with calls from groups asking for pledges.
    • Does not cover calls from tax-exempt non-profit organizations and calls that aren’t commercial.

Register your parents with the Direct Marketing Association to remove their names from its national mailing list.


10 Things to Know About Identity Theft

Identity theft is often in the news, but there are a lot of misconceptions swirling around about how to best protect yourself.

While some identity thieves focus on getting your credit cards and maxing them out before you even realize they're missing, an increasing number are using one piece of information about you -- often a credit card number -- to steal your entire identity.

Though many folks worry about keeping their credit card information secure when shopping online, the top methods that identity thieves use to steal personal data are still low-tech, according to Justin Yurek, the president of ID Watchdog, an identity theft-monitoring firm. "Watch your personal documents, be careful to whom you give out your data over the phone, and be careful of mail theft," he says.

Indeed, a February 2009 study by Javelin Strategy & Research found that of the 9.9 million identity-theft cases reported in 2008 -- resulting in a loss of $48 billion -- online theft accounted for only 11% of incidents. Stolen wallets, checkbooks and credit and debit cards made up almost half.

No one is immune to identity theft, but armed with a little knowledge about how identity thieves operate -- and a little common sense -- you can stay one step ahead of them.

1. Thieves don't need your credit card number to steal it. Conversely, they don't need your credit card to steal your identity. Identity thieves are crafty; sometimes all they need is one piece of information about you, and they can easily gain access to the rest. As a result, says Heather Wells, a recovery manager at ID Experts, an identity-protection company, it's crucial to lock up important documents at home. "Secure birth certificates, Social Security cards, passports -- in a safe deposit box or in a safe hidden at home," she says. "And that includes credit cards when not in use."

2. The nonfinancial personal information you reveal online is often enough for a thief. Beware of seemingly innocent personal facts that a thief could use to steal your identity. For example, never list your full birthdate on Facebook or any other social-networking website. And don't list your home address or telephone number on any website you use for personal or business reasons, including job-search sites.

3. Be careful with your snail mail. "Follow your billing cycles closely," says Lucy Duni, a vice president of consumer education at TrueCredit. "If a credit card or other bill hasn't arrived, it may mean that an identity thief has gotten hold of your account and changed your billing address." Al Marcella, a professor at Webster University's School of Business and Technology in St. Louis and an expert on identity theft, suggests that when you order new checks, pick them up at the bank instead of shipping them to your home. "Stolen checks can be altered and cashed by fraudsters," says Duni. And never place outgoing mail in your mailbox or door slot for a carrier to pick up. Anyone can grab it and get your credit card numbers and other financial information. Take it to the post office yourself.

4. Review bank and credit card statements monthly -- and preferably more often. Watch for charges for less than a dollar or two from unfamiliar companies or individuals. Thieves who are planning to purchase a block of stolen credit card numbers often first test to check that the accounts haven't been canceled by aware customers. They do so by sending a small charge through, sometimes for only a few pennies. If the first charge succeeds, they'll buy the stolen data and make a much larger charge or purchase. They're guessing -- often correctly -- that most cardholders won't notice such a tiny charge. In addition, many of the fraud alerts you can set on your accounts aren't triggered by small dollar amounts. Reviewing your credit report on a regular basis is also a good idea, but usually by the time a fraudulent transaction reaches your credit report, it's too late.

5. If an ATM or store terminal looks funny, don't use it. "Make sure there is no device attached to any ATM card slot you use," says Wells. "As a general rule, the mouth of a card receptacle on an ATM machine should be flush with the machine or have only a very slight lip." If it looks or feels different when you swipe your card, or has an extra piece of plastic sticking out from the card slot, it may be a skimmer, an electronic device placed there by thieves that captures your credit card information when you swipe it. If you notice it after you've already inserted your card, you should alert your bank so it can watch for any fraudulent charges to your account.

6. Identity thieves love travelers and tourists. Scott Stevenson, the founder and CEO of Eliminate ID Theft, an ID theft protection company, said that when traveling, you should be alert to strangers hovering when you use a credit card at an ATM or phone, and to avoid public wireless Internet connections unless you have beefed-up security protection.

7. Identity thieves are sneaky; you need to be sneaky, too. There are a few simple things you can do to protect your credit card in case it falls into the wrong hands. "Sign your credit card with a Sharpie so your signature can't be erased and written over," suggests Echo Montgomery Garrett, a writer in Marietta, Ga. Consultant Sarah Browne of Carmel, Calif., had all but one credit card stolen from a hotel room. The card that was spared still had the "please activate" sticker on it. Though Browne had activated the card, she forgot to remove the sticker. "The thieves must have known that you have to activate a new card from the phone number listed with the credit card company, so they didn't bother with it," she said. Since then, she leaves the activation stickers on all of her cards. Indeed, when a thief struck a second time at a public function, Browne's stickered cards were again left untouched.

8. Pay attention at the checkout line. If a cashier or salesperson takes your card and either turns away from you or takes too long to conduct what is usually a normal transaction, she may be scanning your card into a handheld skimming terminal to harvest the information. Thieves don't need a handheld scanner to capture your information. According to Mark Cravens, the "Anti-Scam Doctor" and author of "The Ten Commandments of Investing," they can take a picture of the front and back of your card with a cellphone or merely swap out cards. "Look at your card when they hand it back and make sure it's yours, and not another gold, silver, or blue card that looks like yours," he says. "You may not notice they swapped your card for days."

9. Go paperless in as many ways as possible. Sandy Shore, a training manager with Novadebt, a nonprofit, New Jersey-based credit-counseling agency, suggests clients cut back on the mail they receive from banks and financial institutions by discontinuing paper bills and statements. "Access your financial statements at the issuer's website instead," she says. This strategy has the added bonus of an environmental benefit. Similarly, Vaclav Vincalek, the president of Pacific Coast Information Systems, an IT security firm, recommends that whatever paper receipts and financial statements you do receive go through the shredder instead of into the wastebasket. "Never throw away a credit card slip," he says. "Instead, shred anything that has any number, name, address on it."

10. Identity theft insurance can pay off, but you need to read the fine print. Several companies offer identity theft insurance, which covers the money you shell out to repair your identity. This includes whatever you spend on phone calls, making copies of documents and mailing them, hiring an attorney and, in some cases, lost wages. However, the insurance -- which costs about $50 a year -- does not reimburse you for funds you lost. Your current homeowners policy may include identity theft insurance in your package, so check first before signing up with an outside company. Also, some companies are starting to offer identity theft insurance as an employee benefit.